Livingstone tax row grows

Labour's Ken Livingstone has faced accusations over his tax affairs.The row over Ken Livingstone’s taxes took a new turn this morning when the Labour candidate for Mayor of London delayed publishing his tax return and called on rivals to publish “the tax returns for their households.”

Last month the Telegraph revealed that the former Mayor has his earnings from media and speaking engagements paid into a limited company.

By doing so any receipts are not classed as personal income and so do not attract income tax until Mr Livingstone draws them as a salary. Any profits made by the company are subject to corporation tax.

Mr Livingstone, an outspoken critic of tax avoidance, has previously defended the arrangements, which are legal, saying he uses some of the money to pay for staff and that “no-one pays income tax on the money they use to pay other people’s wages”.

Appearing on last night’s edition of BBC’s Newsnight programme, Mr Livingstone, Boris Johnson, and Brian Paddick agreed to a suggestion by Green candidate Jenny Jones that all four publish their tax details.

This morning Ms Jones said: “Surely the best way to overcome current speculation over candidates tax returns is for us to publish our tax returns for the last four years?

“I hope that way the debate can move on.”

Ms Jones, who earned approximately £160k from her work at City Hall over the current four-year term, says she will release full details of her tax returns early next week.

Mayor Boris Johnson released a letter from his accountant showing he earned just under £1.7m between 2007/08 – 2010/11 on which he paid tax and national insurance of £684,719.

Mr Paddick’s campaign have released figures for 2008/09 – 2010/11 showing an income of £344,146 and tax payments of £100,693.

Mr Livingstone initially declined to publish his tax records, and instead asked rivals to “publish in full the tax returns for their households for this mayoral term.”

A letter issued by his campaign states: “We believe that household income publication is necessary for full disclosure as the question of Ken’s income and his wife’s income and their tax has been central to the coverage of this issue. Publication of Ken’s returns alone will not address many of the questions that have been raised.”

However Mr Livingstone has since issued figures showing a total personal income of £342,041 for 2007/08 – 2010/11 and a tax liability of £113,861.

In a statement issued prior to publication of the figures, the Livingstone campaign said: “The only way to answer all the questions about this issue and to move the debate on the real issues facing London is for full household income disclosure. This should apply to all the candidates equally to avoid any further questions about the income and tax affairs that may or may not be applicable to them through their households. The same principles need to be applied to all the candidates if this process is to be seen as open and fair.”

The Livingstone campaign has also suggested that “the disclosure should be the full actual tax returns in PDF format” which should be provided to an independent body which would publishes them simultaneously.

Mr Livingstone later issued the following statement: “I will lodge the details for the last four years with an independent body or individual, to be published simultaneously when all four main candidates have provided them. I will set out income to my company over the last four years, how much my wife and I received and how much tax was paid. Full household income and tax must be released by all candidates because the question of the overall household income and tax has continuously been the subject. This fully meets the terms agreed on Newsnight.”

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Comments

I have done a separate comment piece on this, but the main long term issue surely is that opening up earnings to the public in a country like the UK will lead to some very interesting sideshows: these will inevitably dominate elections and will be used by protagonists’ media supporters as ways of smearing opponents, even when no law has been broken. It may be that the outcome will be that no-one who has actually run a business or done anything outside politics will want to take the plunge and involve themselves in public life. Earnings and assets of individuals and their families are emotive as an issue, and if they are to be introduced to campaigns in Britain, it all needs to be carefully done.

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